Copper Reaches Near-Record High Amid Middle East Tensions

Copper Reaches Record High as Middle East Tensions Ease

Copper prices surged by 2.7% to settle at a fresh record closing price of $13,943 per ton on Monday, surpassing the previous peak of $13,618 hit on January 29. The increase marked the largest gain in more than a month, as the metal shrugged off the apparent deadlock between the US and Iran over how to end the war and reopen the Strait of Hormuz.

All main metals contracts on the London Metal Exchange posted gains, after the bourse's combined gauge of prices ended Friday on an all-time high. Metals from copper to zinc have been resilient in the face of the Middle East war, partly thanks to signs of demand outstripping supply. Last week's upward momentum carried into Monday despite US President Donald Trump rejecting Iran's latest peace proposal as "totally unacceptable," with the two sides far apart on a framework to end the conflict.

The metal market's resilience is primarily due to factors such as tight supply and declining inventories in China. Copper is up about 12% since the end of 2025, and there were plenty of bullish takes at a major gathering of metals-market participants in Hong Kong last week. Industrial metals are also getting a boost from China's robust exports, which rose 14% from a year earlier in April, including booming shipments of clean-tech goods that tend to be copper-intensive.

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The table above shows the year-to-date gains for various metals.

Demand for metals for the energy transition and defense, coupled with supply headwinds, will boost copper's resilience in a worst-case scenario that entails a prolonged closure of the Strait of Hormuz, according to Citigroup Inc. analysts. Traders are also monitoring market disruptions in China, where a regulatory crackdown on a form of metals-backed financing has triggered turmoil for some companies. The issue has limited supplies of scrap, narrowing the usual discount between scrap prices and refined copper.

Aluminum rallied more than 2% while nickel gained 1.9%. The closure of Hormuz impacts aluminum smelters in the Gulf and nickel producers elsewhere who depend on the region for supplies of sulfur. "Aluminum continues to underperform on 'de-escalation' days for the Middle East conflict, but given the long timeframe needed to restart smelters, we think this may offer buying opportunities," Morgan Stanley analysts led by Amy Gower said in a note. "Aluminum could also see further support, in LME prices or regional premiums, if we see further curtailments in the Middle East if the Strait of Hormuz is closed for longer."

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